<PAGE>




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                     --------------------------------------
                                    FORM 10-Q

(MARK ONE)
         [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
                  JUNE 30, 2001
                                                     OR
         [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934
                  FOR THE TRANSITION PERIOD FROM __________ TO __________

                          COMMISSION FILE NUMBER: 1-13861

                          MED-EMERG INTERNATIONAL INC.
                         (Exact Name of Registrant as Specified in Its Charter)

PROVINCE OF ONTARIO, CANADA
(State or Other Jurisdiction of Incorporation or Organization)

2550 Argentia Road, Suite 205
Mississauga, Ontario, Canada                         L5N 5R1
(Address of Principal Executive Offices)             (Zip Code)

Registrant's telephone number, including area code:  (905) 858-1368

                  Indicate by check mark whether the  registrant:  (1) has filed
all  reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter  period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]

                  As of August 10, 2001,  7,962,499  shares of the  registrant's
Common Stock were outstanding.



<PAGE>



                          MED EMERG INTERNATIONAL INC.
                   JUNE 30, 2001 QUARTERLY REPORT ON FORM 10-Q
                   -------------------------------------------







                                TABLE OF CONTENTS
                                -----------------



                         PART I B FINANCIAL INFORMATION

<TABLE>
<CAPTION>


                                                                                                          Page Number
<S>               <C>                                                                                     <C>
Item 1.           Financial Statements ...................................................................
Item 2.           Management's Discussion and Analysis of Financial Condition and
                       Results of Operations..............................................................

                                             PART II B OTHER INFORMATION

Item 3.           Quantitative and Qualitative Disclosures about market risk..............................
Item 4.           Submission of Matters to a Vote of Security Holders.....................................
Item 5.           Exhibits and Reports on Form 8-K........................................................

                  Signatures..............................................................................
</TABLE>



<PAGE>


                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This Quarterly Report on Form 10-Q contains forward-looking  statements
as  defined  by  the  Private   Securities   Litigation   Reform  Act  of  1995.
Forward-looking  statements  include  statements  concerning plans,  objectives,
goals,  strategies,  future events or performance and underlying assumptions and
other  statements,  which are other than statements of historical  facts.  These
statements are subject to uncertainties and risks including, but not limited to,
product and  service  demand and  acceptance,  changes in  technology,  economic
conditions,  the impact of competition and pricing,  government regulation,  and
other risks defined in this  document and in statements  filed from time to time
with the Securities and Exchange Commission. All such forward-looking statements
are expressly qualified by these cautionary  statements and any other cautionary
statements that may accompany the forward-looking  statements.  In addition, Med
Emerg International Inc. disclaims any obligations to update any forward-looking
statements to reflect events or circumstances after the date hereof.

PART I  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
<S>                                                                                                        <C>
Consolidated Balance Sheets as of June 30, 2001  and December 31, 2000.....................................
Consolidated Statements for the three and six months ended June 30, 2001 and 2000..........................
Consolidated Statement of Cash Flows for the six months ended June 30, 2001 and 2000.......................
Notes to Unaudited Consolidated Financial Statements.......................................................

</TABLE>


<PAGE>

                            MED-EMERG INTERNATIONAL INC.
                             CONSOLIDATED BALANCE SHEET
            AS AT JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000 (AUDITED)
                                      (IN US$)

<Table>
<Caption>
                                                JUNE 30          DECEMBER 31
                                                 2001               2000
                                               -----------       -----------
<S>                                            <C>               <C>
ASSETS

CURRENT ASSETS
   Cash and short term investments             $    74,941       $   121,965
   Accounts receivable                           2,480,879         1,994,446
   Prepaid expenses and other                      230,281           231,167
                                               -----------       -----------
                                                 2,786,101         2,347,378
                                               -----------       -----------

Capital assets                                   1,484,982         1,667,716
Goodwill                                         1,743,264         1,837,275
Other assets                                       776,457         3,372,761
Deferred income taxes                            1,471,917           159,440
Investment in Healthy Connect.com                  479,165
                                               -----------       -----------
                                               $ 8,741,886       $ 9,384,570
                                               -----------       -----------
                                               -----------       -----------

LIABILITIES

CURRENT LIABILITIES
   Bank indebtedness                           $ 1,259,769       $ 1,567,676
   Accounts payable and accrued liabilities      2,950,360         2,721,131
   Restructuring reserve                            24,334            36,908
   Note payable to related party                        --           175,059
   Current portion of long-term debt               325,688           318,562
                                               -----------       -----------
                                                 4,560,151         4,819,336

Long term debt                                          --            11,537
                                               -----------       -----------
                                                 4,560,151         4,830,873
                                               -----------       -----------

Minority interest                                       --           411,352

Commitments and contingencies (note 8)

   Capital stock                                10,456,505        10,058,975
   Contributed surplus                           1,022,100         1,022,100
   Deficit                                      (6,953,413)       (6,634,408)
   Cumulative translation adjustment              (343,457)         (304,322)
                                               -----------       -----------
                                                 4,181,735         4,142,345
                                               -----------       -----------
                                               $ 8,741,886       $ 9,384,570
                                               -----------       -----------
                                               -----------       -----------

             The accompanying notes are an integral part of these
                 unaudited consolidated financial statements.

</Table>

<PAGE>

                              MED-EMERG INTERNATIONAL INC.
                           CONSOLIDATED STATEMENT OF OPERATIONS
                FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
                                        (IN US$)
<Table>
<Caption>
                                                   THREE MONTHS ENDED            SIX MONTHS ENDED
                                                 --------------------------    ----------------------------
                                                 JUNE              JUNE           JUNE            JUNE
                                                 2001              2000           2001            2000
<S>                                              <C>             <C>            <C>             <C>

Revenue                                          $ 4,247,913     $ 4,519,225    $ 8,007,626     $ 8,318,818
Physician fees and other direct costs              2,638,703       2,843,671      4,915,309       5,118,224
                                                 -----------     -----------    -----------     -----------
                                                   1,609,210       1,675,554      3,092,317       3,200,594
                                                 -----------     -----------    -----------     -----------
Expenses
   Salaries and benefits                             757,739         928,130      1,518,666       1,633,501
   General and administration                        248,177         239,008        410,004         405,181
   Occupancy costs and supplies                      338,692         475,178        745,374         907,540
   Public company costs                               49,482          33,785         64,268          55,477
   Travel & Marketing                                 85,716          28,076        128,306          76,019
                                                 -----------     -----------    -----------     -----------
                                                   1,479,808       1,704,177      2,866,618       3,077,718
                                                 -----------     -----------    -----------     -----------
Income before amortization, interest
   & financing costs & taxes                         129,404         (28,623)       225,699         122,876

   Interest and financing expense                     59,616          45,341        110,117          94,946
   Amortization of capital assets                    130,843          91,083        174,944         186,933
   Amortization of goodwill                           38,791          48,111         75,893          93,345
   Amortization of other assets                       43,636          46,063         87,523          91,994
   Healthy Connect.com software
     & development costs                                  --         703,192        271,295       1,169,136
   Dilution gain                                          --                        (25,938)             --
   Loss on disposition                                17,390                         17,390
                                                 -----------     -----------    -----------     -----------
                                                     290,277         933,790        711,225       1,636,354
                                                 -----------     -----------    -----------     -----------

Loss before income taxes                            (160,873)       (962,413)      (485,526)     (1,513,478)
   Income taxes (recovery)                           (64,349)       (181,369)      (194,210)       (301,189)
                                                 -----------     -----------    -----------     -----------
Net loss before minority interest
   & preferred shares                                (96,524)       (781,044)      (291,316)     (1,212,290)

   Minority interest                                  18,971        (138,007)       (40,084)       (144,444)
                                                 -----------     -----------    -----------     -----------
Net loss before preferred share dividends           (115,495)       (643,037)      (251,232)     (1,087,846)

   Preferred share dividends                         (34,022)        (34,051)       (67,772)        (68,409)
                                                 -----------     -----------    -----------     -----------
Net loss                                            (149,517)       (677,088)      (319,004)     (1,136,255)

Deficit, beginning of the year                    (6,803,896)     (4,794,733)    (6,634,409)     (4,335,566)

Deficit, end of the period/year                  $(6,953,413)    $(5,471,821)   $(6,953,413)    $(5,471,821)
                                                 -----------     -----------    -----------     -----------
                                                 -----------     -----------    -----------     -----------

Basic and fully diluted loss, per share          $     (0.02)    $     (0.12)   $     (0.04)    $     (0.20)

Weighted average number of common shares           7,817,994       5,653,825      7,417,994       5,653,825

          The accompanying notes are an integral part of these consolidated financial statements.

</Table>

<Page>

                                MED-EMERG INTERNATIONAL INC.
                            CONSOLIDATED STATEMENT OF CASH FLOWS
                          AS AT JUNE 30, 2001 AND 2000 (UNAUDITED)
                                         (IN US$)

<Table>
<Caption>
                                                                 JUNE 30               JUNE 30
                                                                  2001                   2000
                                                                -----------           ------------
<S>                                                             <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss for the period                                      $ (251,232)           $(1,067,846)
   Adjustments for:
      Amortization of capital assets                               174,944                186,933
      Amortization of goodwill and other assets                    278,441                185,340
      Deferred income taxes                                       (194,210)              (301,187)
      Loss on sale of clinics & capital assets                      17,390
      Dilution gain from HealthyConnect.com                       (25,938)
      Minority interest                                            (40,084)
      Stock compensation                                                --                 39,398
                                                                -----------           ------------
                                                                   (40,689)              (957,383)
   Increase (decrease) in non-cash working capital components    (1,402,184)              (16,812)
                                                                -----------           ------------
                                                                 (1,442,873)             (974,175)
                                                                -----------           ------------
                                                                -----------           ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Additions to capital assets                                      (53,350)           (1,478,603)
   Other assets                                                   2,448,553               170,648
   Sale of investment in clinic                                     (15,099)
   Investment in Healthy Connect.com                               (479,165)
                                                                -----------           ------------
                                                                  1,900,940            (1,307,955)
                                                                -----------           ------------
                                                                -----------           ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Bank indebtedness                                               (307,907)              200,237
   Issue of common shares                                           397,530               357,806
   Repayment of debt                                                 (4,411)             (139,422)
   Due to minority interest                                        (411,352)            1,541,559
   Due to related parties                                          (175,059)                   --
                                                                -----------           ------------
                                                                   (501,199)            1,960,180
                                                                -----------           ------------
                                                                -----------           ------------
Effect of foreign currency exchange rate changes                     (3,692)              248,212

DECREASE IN CASH AND SHORT-TERM INVESTMENTS                         (46,824)              (73,738)
Cash and short-term investments, beginning of period                121,765               229,965
                                                                -----------           ------------
Cash and short-term investments, end of period                  $    74,941           $   156,228
                                                                -----------           ------------
                                                                -----------           ------------

The accompanying notes are an integral part of these unaudited consolidated financial statements.

</Table>

<PAGE>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000

1.       ORGANIZATION AND DESCRIPTION OF BUSINESS

Med-Emerg International Inc. is a publicly traded company listed on the NASDAQ
and Boston Stock Exchanges. The Company completed its initial public offering
in February 1998.

The Company's operations are divided into three divisions, Physician and
Nurse Recruitment  Services,  Physician  Management  Services and Healthcare
services.  Med-Emerg's strategy in 2001 will be to focus on Healthcare
services. The Company  intends to broaden its recruiting  and  management
services over a wider  geographic  base, as well as securing  contracts with
the  pharmaceutical industry and the federal government.

For physician and nurse  recruitment  services,  the Company provides  emergency
department physician and nurse recruitment,  staffing and administrative support
services to hospitals, on a contractual basis. At June 30, 2001, the Company had
17 contracts for physician staffing and 8 contracts for nurse staffing.

Under physician management services, the Company owns and manages medical
clinic facilities. This provides physicians with the ability to practice
within a professional  managed  network  and to  concentrate  on the
clinical aspects of their  practices.  The company  owns all the clinic
assets including medical equipment.  At June 30, 2001, the Company owned and
managed 23 clinics.

Healthcare  services are a business  platform  extension  for the company and is
comprised of government and  pharmaceutical  contracts.  Med-Emerg was awarded a
3-year management service contract to provide up to 400 medical personnel to all
Canadian Forces Bases across Canada.  The contract commenced at the beginning of
April 2001 and  extends  through  March 31,  2004,  eligible  for with a further
three-year  renewal.  The Company has successfully  completed the implementation
stage of the contract and has now entered the  maintenance  phase.  Through this
agreement  Med-Emerg  recruits,   schedules  and  manages  physicians,   nurses,
dentists,  physiotherapists  and other  regulated  healthcare  professionals  to
provide services as required by the Canadian Forces health authority resident on
each base.

Schering Canada Inc, a leading  Canadian  pharmaceutical  supplier,  has entered
into an agreement  to have MEII  clinics  provide  special  access  Remicade(TM)
infusion  services to patients  suffering  from Crohn's  Disease and  Rheumatoid
Arthritis.  Under this  agreement,  MEII will provide medical  professionals  to
provide  infusion  services  for  patients  receiving   Remicade(TM)  at  clinic
locations across Canada.

As a result  of  management  and the  board's  decision  to focus on  Healthcare
services,  the Company intends to divest its interest in  HealthyConnect.com  in
fiscal 2001.


<PAGE>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000

2. BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with Canadian generally accepted accounting principles for interim
financial  reporting.  These  financial  statements  consolidate,  with minority
interest,  the  accounts of  Med-Emerg  International  Inc.  and all wholly- and
partially-owned subsidiaries of Med-Emerg International Inc.

Commencing   with  the   quarter   ended  June  30,  2001  the   investment
in Healthyconnect.com  is not consolidated but rather accounted for at cost.
Healthyconnect.com issued shares to employees in lieu of wages and to outside
investors. This changed Med-Emerg International Inc.'s ownership position
from 62.8% to 33.9%. Any possible gain or loss on this transaction was not
determinable at the time of these financial statements. This has resulted in
the following changes to the  consolidated  balance  sheet as at June 30,
2001 as  compared to December 31, 2000:

<Table>
<Caption>

<S>                                                   <C>
Decrease in cash                                         (31,736)
Decrease in accounts receivable                          (88,056)
Decrease in prepaids                                     (24,769)
Decrease in accounts payable                             422,470
Decrease in note payable to related party                175,059
                                                      -----------
Increase in working capital                              452,968

Decrease in other assets                              (2,608,939)
Increase in deferred taxes                             1,147,068
Increase in investment in Healthyconnect.com             479,165

Decrease in minority interest                            415,535
                                                      -----------
Decrease in net assets                                  (114,203)
                                                      -----------

</Table>

In the opinion of  management,  the  unaudited  interim  consolidated  financial
statements contained in this report reflect all adjustments,  consisting of only
normal recurring  accruals,  which are necessary for a fair  presentation of the
financial  position,  and the  results of  operations  for the  interim  periods
presented.  The results of operations for any interim period are not necessarily
indicative of the results for the full year.

These  consolidated   financial  statements,   footnote  disclosures  and  other
information  should  be read in  conjunction  with  the  consolidated  financial
statements and the notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2000.

3. BANK COVENANTS

As at June 30, 2001 the Company was in violation of certain loan covenants.
The company has negotiated forbearance agreements with its secondary bankers
and is confident of achieving this objective with its primary banker. As a
condition of forbearance, a repayment schedule has been agreed to.

<PAGE>


4. ACQUISITIONS AND DISPOSITIONS

Effective  November  5,  1999,  the  Company  purchased  all of the
outstanding securities of YFMC  Healthcare  Inc. a Canadian  physician
management  services organization  that owns and  manages  medical  clinics
in  exchange  for similar securities of the Company. As at June 30, 2001,
the balance of the  integration  costs in  connection  with the acquisition
was $ 24,334.

As part of ongoing efforts to improve profitability, the company disposed of the
York Lanes  clinic and  terminated  the  Kensington  clinic  management  service
contract (at the start of the second quarter).

In order to comply  with the  planned  divestiture  of  Healthyconnect.com,  the
company's  ownership position was diluted in the second quarter,  to less than a
majority position.




MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000

5. CAPITAL STOCK

Pursuant to an  agreement  dated  April 6, 2001,  the  Company  raised  $400,000
(before issuance costs) on the issuance of 800,000 shares at $0.50 each, through
a private placement.

Warrants and Stock Option Plans

Under a stock  option  plan,  a director was granted an option on May 7, 2001
to purchase  10,000 common shares of the Company at a price of $1.04 (US) per
common share (being the closing price of the common shares of the Corporation
on May 4, 2001, as quoted on NASDAQ).

6. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES

These  consolidated  financial  statements have been prepared in accordance with
Canadian  generally accepted  accounting  principles  ("Canadian  GAAP"),  which
conform in all material  respects  applicable to the Company,  with those in the
United States ("U.S.  GAAP") during the periods presented except with respect to
the following:

Consolidated statements of operations

If United States GAAP were  employed,  net loss for the period would be adjusted
as follows:


<PAGE>

<Table>
<Caption>

<S>                                              <C>           <C>
Net income (loss) based on Canadian GAAP         (251,232)     (1,067,846)
Start-up costs amortized/(deferred)                21,924          11,055
Deferred acquisition costs                              -               -
Goodwill amortization                             (27,866)        (27,420)
Dilution gain                                     (25,938)              -
                                                 --------     -----------
Net loss based on United States GAAP             (283,112)    $(1,084,211)
Primary loss per share                             ($0.04)         ($0.19)

</Table>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000


<PAGE>

<Table>
<Caption>

                                                    June          December
                                                    2001            2000
                                                 ----------      ----------
<S>                                              <C>             <C>
Deficit based on Canadian GAAP                   (6,953,413)     (6,634,408)
Start-up costs deferred                            (176,908)       (200,907)
Goodwill amortization                               (91,185)        (63,319)
Dilution gain                                       (25,938)     (1,188,525)
                                                 ----------      ----------
                                                 (7,247,444)     (8,087,159)
                                                 ----------      ----------
                                                 ----------      ----------
Goodwill & other assets based on Canadian GAAP    2,519,721       5,210,036
Start-up costs deferred                            (176,908)       (200,907)
Goodwill on purchase of YFMC Healthcare Inc.        996,687       1,024,553
                                                 ----------      ----------
                                                  3,339,500      6,033,682
                                                 ----------      ----------
                                                 ----------      ----------
</Table>


(a) Deferred Income Taxes

Under U.S.  GAAP,  the  Company is  required to follow  Statement  of  Financial
Accounting  Standards  (SFAS No.  109)  "Accounting  for  Income  Taxes",  which
requires the use of the "asset and liability  method" of accounting for deferred
income  taxes,  which  gives  recognition  to deferred  taxes on all  "temporary
differences"  (differences  between  accounting  basis  and  tax  basis  of  the
Company's assets and liabilities,  such as the non-deductible  values attributed
to assets in a  business  combination)  using  current  enacted  tax  rates.  In
addition,  SFAS No. 109  requires the Company to record all deferred tax assets,
including future tax benefits of capital losses carried forward, and to record a
"valuation  allowance"  for any deferred tax assets where it is more likely than
not that the asset will not be realized.  The Company has  followed  this method
under Canadian GAAP.




MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000

(b) Deferred Start-up Costs

Under  Canadian  GAAP,  development  and  start-up  costs,  which  meet  certain
criteria, are deferred and amortized.  Under United States GAAP, development and
start-up costs are expensed as incurred.


<PAGE>


(c) Dilution Gain

Under US GAAP,  the gain  realized on the issuance of the shares of a subsidiary
to third  party at an  amount  greater  than the net book  value is  treated  as
additional paid in capital.

(d) Earnings Per Share

U.S. GAAP requires common shares and warrants to purchase common shares,  issued
or exercisable at prices below the initial public offering  ("I.P.O.") price and
which  were  issued  within  one  year  prior  to  the  initial  filing  of  the
registration  statement  relating to the I.P.O.,  to be treated as if the common
shares were  outstanding  from the beginning of the period in the calculation of
weighted  average number of common shares  outstanding and loss per share,  even
where such  inclusion  is  anti-dilutive.  Primary  earnings per common share is
determined  using the weighted average number of shares  outstanding  during the
year,  adjusted to reflect the  application  of the  treasury  stock  method for
outstanding options and warrants in accordance with U.S. GAAP.

(e) Stock Compensation

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123), was issued by the Financial Accounting Standards Board
in  October  1995.  SFAS 123  establishes  financial  accounting  and  reporting
standards for  transactions in which an entity issues its equity  instruments to
acquire goods or services from  non-employees,  as well as stock-based  employee
compensation  plans.  All  transactions  in  which  goods  or  services  are the
consideration  received  for  the  issuance  of  equity  instruments  are  to be
accounted for based on the fair value of the consideration  received or the fair
value of the equity instrument issued, whichever is more reliably measurable.

As allowed by SFAS 123,  the Company  has decided to continue to use  Accounting
Principles  Board Opinion No. 25  "Accounting  for Stock Issued to Employees" in
accounting  for the  Company's  Stock  Option Plan (the  "Plan")  for U.S.  GAAP
purposes.




MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000


(f) Goodwill

Under U.S. GAAP, the purchase price of an acquisition  involving the issuance of
shares is  determined  based on the share price for the period  surrounding  the
announcement  date of the  acquisition.  The  share  price  used  for  the  YFMC
Healthcare Inc.


<PAGE>


acquisition under U.S. GAAP was $1.859.  Under Canadian GAAP, the purchase price
is  determined  based  on  the  share  price  on the  date  the  transaction  is
consummated. The share price used for the YFMC Healthcare Inc. acquisition under
Canadian GAAP was $1.25.

(g) Shareholders' Equity
Under U.S.  GAAP,  loans issued to officers to acquire  stock are presented as a
deduction from shareholders' equity (deficit).

Under  Canadian  GAAP,  the  detachable  stock  purchase  warrants  issued as in
conjunction with the private stock offering on January 22, 1996 and subsequently
surrendered,  all as described in note 13, have been given no recognition in the
financial statements.

Under  U.S.  GAAP,   detachable  stock  purchase  warrants  are  given  separate
recognition  from the primary  security issued.  Upon initial  recognition,  the
carrying  amount of the two  securities is allocated  based on the relative fair
values at the date of issuance. Under U.S. GAAP, based on an ascribed fair value
of $0.364 for each of the 1,000,000 share warrants  issued,  share capital would
be lower by $36,406 and, given that the stock  purchase  warrants were cancelled
during the year, the carrying  amount of contributed  surplus would be increased
by $36,406.










MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000



6. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES (cont'd)

The effect on shareholders' equity would be as follows:




<PAGE>

<Table>
<Caption>

                                                               June          December
                                                               2001            2000
                                                            -----------    ------------
<S>                                                         <C>            <C>
Capital stock                                                10,456,505     10,058,975
Capital stock issued on purchase of YFMC Healthcare Inc.      1,087,872      1,087,872
Ascribed fair value of share purchase warrants issued           (36,406)       (36,406)
                                                            -----------    ------------
          Net capital stock - US GAAP                        11,507,971     11,110,441
                                                            -----------    ------------
                                                            -----------    ------------
Contributed surplus                                           1,022,100      1,022,100
Share purchase warrants                                          36,406         36,406
                                                            -----------    ------------
Contributed surplus - US GAAP                                 1,058,506      1,058,506
                                                            -----------    ------------
          Deficit - US GAAP                                  (7,247,444)    (8,087,159)
          Cumulative translation adjustment                    (343,457)      (304,322)
                                                            -----------    ------------
                                                              4,975,576      3,777,466
                                                            -----------    ------------
                                                            -----------    ------------
</Table>


(h) Comprehensive Income

Statement of Financial  Accounting  Standards No. 130, "Reporting  Comprehensive
Income" (SFAS 130), was issued by the Financial  Accounting  Standards  Board in
June  1997.  SFAS  130  establishes  standards  for  reporting  and  display  of
comprehensive income and its components in the financial statements. SFAS 130 is
effective for fiscal years beginning  after December 15, 1997.  Reclassification
of financial  statements for earlier period provided for comparative purposes is
required.

<Table>
<Caption>

                                              June           June
                                              2001           2000
                                           ----------    ------------
<S>                                        <C>           <C>
Net income (loss) (U.S. GAAP)               (283,112)     (1,084,211)
Foreign currency translation adjustment      (39,135)        235,254
                                           ----------    ------------
Comprehensive loss                          (322,247)       (848,957)
                                           ----------    ------------

</Table>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000

(i) REVENUE REPORTING

Under U.S GAAP,  EITF 99-19  outlines the items,  which should be  considered in
determining  whether revenue should be reported on a gross or on a net basis. In
assessing whether revenue should be reported gross with separate display of cost
of sales to arrive at


<PAGE>


gross profit, or on a net basis, the SEC staff considers whether the company:

1. acts as a principal in the transaction,
2. takes title to the products,
3. has risks and rewards of ownership, such as risk of loss for
   collection, delivery, or returns, and
4. acts as agent or broker with compensation on a commission or fee basis.

The company acts both as principal  and as an agent or broker in the  management
of the  clinics.  As a result  the  revenue  amount  reported  in the  financial
statements  are a mix of both gross and net revenues.  Under US GAAP, the mix of
gross  and net  revenue  to be  reported  on the  income  statement  would be as
follows:

<Table>
<Caption>

                                                         June          June
                                                         2001          2000
                                                      ----------    ----------
<S>                                                   <C>           <C>
On a gross basis (Physician & Nurse recruiting and     4,181,122     3,795,981
Healthcare services)
On a net basis (Physician management services)         3,826,504     4,522,837
                                                      ----------    ----------
Total revenue                                          8,007,626     8,318,818
Less: Physician fees & other direct expenses           4,915,309     5,118,224
                                                      ----------    ----------
Gross margin                                           3,092,317     3,200,594
                                                      ----------    ----------
                                                      ----------    ----------
</Table>

7. SEGMENTED INFORMATION

The Company operates under three divisions: Physician and Nurse Recruitment,
Physician Management Services and Healthcare services. The Physician and
Nurse Recruitment division involves contracting with hospitals for the
provision  of physician  staffing,  nurse  staffing and  administrative
support services.  The Company also contracts with clinical facilities and
local communities for the locum or permanent placement of a physician in a
community.

The  Physician  Management  Services  division owns and manages  medical  clinic
facilities,  which provide physicians with the ability to practice medicine in a
professionally managed environment. The clinics include family practice, walk-in
services,  and other related  services such as massage therapy and  chiropractic
services.

The  Healthcare  Services  division  involves  recruiting  and  staffing for the
pharmaceutical  industry and  fulfillment  of  government  contracts.  Through a
contract awarded to Med-Emerg by the Department of National  Defense,  Med-Emerg
recruits, schedule and manage physicians, nurses, dentists, physiotherapists and
other regulated healthcare  professionals


<PAGE>


to provide services as required by the Canadian Forces health authority resident
on each base.

Details are as follows:


<PAGE>


<Table>
<Caption>

                                                          June 30, 2001
                                        ----------------------------------------------------
                                          Physician     Physician
                                           & Nurse      Management   Healthcare
                                                     Three months ended June 30, 2001
                                        ----------------------------------------------------
<S>                                     <C>            <C>           <C>          <C>
Revenue                                  1,702,659      1,799,240     746,014      4,247,913
Gross margin                               267,147        894,630     447,433      1,609,210

Operating income                             9,574        (45,177)    165,007        129,404

                                                      Six months ended June 30, 2001
                                        ----------------------------------------------------
Revenue                                  3,285,436      3,826,504    895,686       8,007,626
Gross margin                               489,308      2,005,904    597,105       3,092,317

Operating income                            16,702        (38,314)   247,311         225,699

Assets employed at end of period         3,265,208      4,897,813    578,865       8,741,886
Depreciation and amortization               83,970        251,910      2,480         338,360

                                                          June 30, 2000
                                        ----------------------------------------------------
                                          Physician     Physician
                                           & Nurse      Management   Healthcare
                                                     Three months ended June 30, 2000
                                        ----------------------------------------------------
Revenue                                  1,915,858      2,603,367                  4,519,225
Gross margin                               397,740      1,277,814                  1,675,554

Operating income                            56,065        (84,688)                   (28,623)

                                                      Six months ended June 30, 2000
                                        ----------------------------------------------------
Revenue                                   3,795,981     4,522,837                  8,318,818
Gross margin                                701,649     2,498,945                  3,200,594

Operating income                            133,994       (11,118)                   122,876

Assets employed at end of period          3,205,911     7,355,206                 11,304,212
Depreciation and amortization                             372,277                    372,277

Assets employed at the end of the period by Healthy Connect.com      743,094

</Table>

<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited  Consolidated  Financial Statements
Six months ended June 30, 2001 and 2000

8. COMMITMENTS AND CONTINGENCIES

"YMFC  HealthCare  Inc., a wholly owned  subsidiary  of MEII, is in receipt of a
letter from Canada  Customs and Revenue  Agency  ("CCRA")  dated April 30, 2001,
adjusting YFMC's Goods and Services Tax returns for the period from December 31,
1992, to December 31, 1996.  The total amount claimed by CCRA for this period is
$253,379.  In the event that YFMC becomes liable to pay any such amount to CCRA,
MEII will claim an indemnity  for such amount  against the directors and certain
named   principals  of  YFMC  pursuant  to  MEII's  rights  under  the  Business
Combination Agreement executed on August 10, 1999."

A contingent liability may exist with Data General Corporation on hardware
equipment leased by Healthy Connect.com.

At June 30, 2001, the lease was in arrears approximately $120,000. No
provision has been made for this liability in the accounts.

9. ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

The Annual and Special Meeting of shareholders  of Med Emerg  International  Inc
was held on June 26,  2001 at the  corporation's  principal  executive  offices.
There were three resolutions presented and approved, namely;

(i)      To elect Directors.  William Thomson,  Ramesh Zacharias,  Robert Rubin,
         Patrick  Michaud and Dr. Frank Baillie were elected as directors of the
         Corporation.

(ii)     To  approve  the  appointment  of  Schwartz,  Levitsky,  Feldman,  llp,
         Chartered   Accountants  as  the   corporation's   independent   public
         accountants for the ensuing year.

(iii)    To approve a special resolution  empowering the directors to determine,
         from time to time, the number of directors of the  Corporation  and the
         number of  directors  to be  elected at each  annual  meeting or annual
         resolutions of the Stockholders, subject to NASDAQ corporate governance
         rules.

10. SUBSEQUENT EVENTS

Med-Emerg  is  committed  to  issue  shares  in  the  next  quarter  to  satisfy
obligations to suppliers of Healthyconnect.com., as follows;

(i)      50,000 shares issued to pay outstanding legal bills

(ii)     150,000 shares issued to TekInsight.com Inc., for work done to develop
         and host the Healthyconnect web site



11. COMPARATIVE FIGURES

Certain of the  comparative  figures  have been  reclassified  to conform to the
current period financial statement presentation.


<PAGE>

         .
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

Med-Emerg  International Inc. ("Med-Emerg" or the "Company"),  based in Ontario,
Canada, is a provider of critical healthcare management services. Established in
1983, the Company provides an essential  service to Canada's  healthcare  system
through the  coordination  and  contract  staffing of emergency  physicians  and
nurses  for  hospitals  and  clinics.  Through  its  emergency-related  services
platform,  Med-Emerg  has expanded to offer a wide  variety of medical  services
including  recruitment,  healthcare staffing,  and physician practice management
services.

Med-Emerg is positioned to establish industry leadership by providing integrated
professional management services in the delivery of healthcare to the healthcare
consumer.  The Company's operations are divided into three divisions:  Physician
and Nurse Recruitment  Services,  Physician  Management Services and third party
Health Care Contracts.  Med-Emerg's strategy is to remain focused on these three
divisions  while  continuing to broaden its  consolidation  of physicians over a
wider geographic base. Med-Emerg is well positioned to benefit from the aging of
the baby boomer  population  and has begun to capitalize on recent  developments
within the North American health care environment.  Specifically,  the Company's
strategy is to leverage  its 15 years of  physician  recruitment  experience  in
becoming  a  dominant  player in  Physician  Management  Services  and to extend
service  delivery  throughout  its healthcare  network of physicians,  patients,
pharmacies and third party payors.



The Company continues to promote its medical manpower staffing services
throughout  Canada.  Demand for emergency care has grown  significantly over the
past ten years,  notwithstanding  the small proportion of physicians focusing on
emergency  medicine.  Moreover,  recruitment of experienced  emergency  medicine
practitioners  by  hospitals  in other  countries  is intense and such demand is
expected to continue  for some time.  Given the  uncertainties  associated  with
patient volumes in several Ontario hospital emergency  departments,  the pool of
available physicians willing to practice emergency medicine has been declining.

The  Company's  ability to provide  solutions and source  physicians  and highly
skilled nurses will be enhanced by its success in developing its dominant status
in the Physician  Management Services  Organization (PMSO) sector. The Company's
business  strategy is to integrate and through its physicians  program offer the
family physician a comprehensive practice opportunity.  Management believes that
the  creation of a dominant  PMSO status will  significantly  contribute  to the
Company's efforts in growing its emergency services recruitment division.


<PAGE>


MEII was deliberate in business  development  strategy to leverage its knowledge
of the  public  hospital  and clinic  staffing  business  into a new,  untouched
horizontal market,  Healthcare services,  government agency healthcare staffing.
In Canada,  provincial and federal governments are responsible for operating and
staffing  health  facilities  associated with Canada's  military,  Department of
Veteran's Affairs, Corrections and Penitentiary Services, Royal Canadian Mounted
Police and Canada's Aboriginal Peoples. The services are often poorly managed.

The  company  was  recently  awarded  the  contract  for  civilian   in-garrison
healthcare  services for the Department of National Defense.  The contract,  the
largest of its kind in Canada is a six year agreement  (three plus another three
years option to renew) that will see MEII recruit and staff an annual complement
in excess of 400 full time  healthcare  providers in all Canadian  Forces Bases.
Annual  costs of services  provided  under this  contract are expected to be $16
million.  MEII  receives  an annual  administrative  fee to  recruit  and manage
required personnel.  MEII has successfully completed the implementation phase of
the contract. During this stage, MEII has hired regional recruiting staff across
Canada to service local Canadian Forces Bases. Standard operating procedures and
training programs have been completed, documented and approved by Defense staff.
Senior staff managing this project has previous Canadian military experience and
this has been helpful in matching the project requirements to the specific needs
of full time regular  forces.  This contract and its  supporting  infrastructure
creates a robust  horizontal  platform that will allow MEII to take advantage of
other major  government  staffing  contracts,  both to penetrate its traditional
hospital staffing and physician management services across Canada.

In March 2001, Med-Emerg  International Inc. and Schering Canada Inc., a leading
Canadian pharmaceutical supplier, entered into an agreement to have MEII provide
special access Remicade-TM-infusion  services to patients suffering from Crohn's
Disease and Rheumatoid Arthritis. Under this agreement, MEII will coordinate and
manage all infusion  services for patients  referred to Schering  Canada  Inc.'s
Remicade-TM-  program at various clinic locations across Canada. It is estimated
that  approximately  40,000  patients  in Canada  suffer  from the  debilitating
effects of these two diseases.  Remicade-TM-  reduces  inflammation  in patients
with Crohn's  disease and  rheumatoid  arthritis by binding to and  neutralizing
TNF-alpha on the cell membrane and in the blood.  Med-Emerg is paid a management
fee to recruit,  credential  and install new infusion  sites across  Canada.  In
addition to the management fee the company also receives an  administrative  fee
to coordinate and schedule  patients  visiting these locations.  The Company has
developed its own  proprietary  scheduling  software that  coordinates  infusion
nurses,  patients,  drug delivery and site schedules together.  As of the end of
June,  this program has opened six sites across  Canada and has  coordinated  80
infusion sessions. This is beginning to grow rapidly and the company expects the
third quarter to see an additional  300-500 infusion  sessions  scheduled at its
facilities.  It is the Company's  strategy to leverage this network of providers
and   scheduling   system  to  several   others  of  the  new   infusion   based
pharmaceuticals that are being released onto the market.


<PAGE>


During the second quarter,  the company  completed its redesign of the physician
management  services  delivery model. The Company embarked on an aggressive plan
to improve the  profitability of its business units and has completed a complete
review of its individual clinics.  Locations not achieving earnings expectations
were closed.  The second phase of management  strategy is to now consolidate its
smaller,  lower  margin  sites into larger  multi-disciplinary  medical  centers
focused on family  practice  with on-site  specialty  referrals.  The new model,
which has been  successfully  tested  at one of the  company's  larger  clinics,
demonstrates a better  distribution of overhead costs and increased revenues and
earnings.  The company  believes that its new delivery model will  significantly
improve performance of this business division over the next year.


Med-Emerg is  positioning  itself to take a market  leadership  role in Canada's
healthcare industry. The retooling of its primary business units has resulted in
modest  earnings that will  translate  into higher  margin  business in the near
future.





RESULTS OF OPERATIONS
Second Quarter Ended June 30, 2001 compared to Second Quarter Ended June 30,
2000

REVENUES.  Company wide revenues  decreased by $271,312 or 6.0 % from $4,519,225
in the second  quarter  of 2000 to  $4,247,913  in the  second  quarter of 2001.
Year-to-date  revenue  decreased by $311,192 or 3.7% to  $8,007,626  for the six
months ended June 30, 2001 compared to $8,318,818 for the same period in 2000.

Revenues  generated by Physician  Management  Services  decreased by $804,127 or
30.9 % from  $2,603,367 in the second  quarter of 2000 to $1,799,240  during the
second  quarter of 2001.  For the six  months  ended  June 30,  2001,  Physician
Management  Services  revenue was  $3,826,504,  which  represents  a decrease of
$696,333 or 15.4% over the six months ended June 30, 2000. This change is due to
the closure of certain clinics that were not meeting earnings expectations.

Revenues from Physician and Nurse  Recruiting  decreased by $213,199 or 11.1% to
$1,702,659  during the second quarter of 2001 from $1,915,858 during same period
for 2000.  Revenues  for the six months ended June 30, 2001 were  $3,285,436,  a
$510,545  or 13.4%  decrease  from the same  period  in 2000.  The  decrease  in
revenues resulted from the completion of a large  international  contract during
the  previous  period  and  the  loss of a large  staffing  contract  due to the
government closure of an emergency room facility.

Revenues from  Healthcare  Services,  being a new business  platform  extension,
increased  by  100%  or  $746,014  compared  to  the  same  quarter  last  year.
Year-to-date  Healthcare  Services revenue increased by $895,686 or 100% for the
six months ended June 30, 2001 compared to the same period in 2000.


<PAGE>


PHYSICIAN FEES AND OTHER DIRECT COSTS.  Physician  fees and direct costs,  which
primarily represents fees to contract physicians,  decreased by $204,968 or 7.2%
from  $2,843,671  in the  second  quarter  of 2000 to  $2,638,703  in the second
quarter of 2001.  For the six months  ended June 30,  2001,  physician  fees and
direct  costs  decreased  by $202,915  or 4.0% to  $4,915,309  from  $5,118,224.
Physician  fees and  other  direct  costs  decreased  as a percent  of  revenue,
representing  62.1% of revenues for the quarter ended June 30, 2001 and 62.9% of
revenues for the quarter  ended June 30, 2000.  The decrease as a percentage  of
revenue  is  largely  due to the  favourable  mix of  revenue  as higher  margin
Healthcare   services  replaced  lower  margin  Physician   Management  Services
(unprofitable clinics continued to be sold off). Physician fees and other direct
costs decreased as a percent of revenue,  representing 61.4% of revenues for the
six months  ended June 30, 2001 and 61.5% of revenues  for the six months  ended
June 30, 2000.

Physician  fees and other  direct  costs of the  Physician  Management  Services
division  decreased  by  $420,943  or 31.7 % from  the  second  quarter  of 2001
compared  to the same  period in 2000.  For the six months  ended June 30,  2001
physician fees and other direct costs was $1,820,600  compared to $2,023,892 for
the six months ended June 30, 2000,  which  represents a decrease of $203,292 or
10.0%.

Physician  fees and  other  direct  costs of the  Physician  & Nurse  Recruiting
division  decreased by $82,606 or 5.4% from the second  quarter of 2001 compared
to the same period in 2000.  Year-to-date  physician fees and other direct costs
decreased  by $298,204 or 9.6% from  $2,796,128  for the period  ending June 30,
2001 compared to $3,094,332 for the same period in the 2000 year.

Physician fees and other direct costs of the Healthcare Services division, being
a new business platform extension as noted above,  increased by 100% or $298,581
for the three months ended June 30, 2001.  These costs were only incurred during
the second quarter.


OPERATING  EXPENSES.  Operating  expenses have decreased by $224,371 or 13.1% to
$1,479,806 in the second  quarter of 2001 from  $1,704,177 in the second quarter
of 2000.  For the  first six  months in 2001  operating  expenses  decreased  by
$211,100 or 6.9% to $2,866,618 from $3,077,718 for the first six months in 2000.

PROVISION FOR INCOME TAXES. The income tax recovery is based on an effective tax
recovery  rate for the quarter of 40%.  The company  expects to realize  taxable
earnings from the Healthcare Service division due to existing contracts, against
which loss carry forwards can be applied.


NET PROFIT/LOSS. The Company reported income before HealthyConnect.com,
amortization,  interest,  taxes and  financing  costs of $129,404  for the three
months  ended June 30,  2001 as compared  to a loss of  $(28,623)  for the three
months ended June 30, 2000.  The company  reported a net loss of $(115,495)  for
the three  months  ended June 30, 2001 as compared to  $(643,037)  for the three
months  ended June 30, 2000.  Income  before  HealthyConnect.com,  amortization,
interest,  taxes and financing  costs for the six months ended June 30, 2001 was
$225,699 as compared  to


<PAGE>


income of $122,876 for the six months  ended June 30,  2000.  For the six months
ended,  June 30 2001, the company reported a net loss of $251,232 as compared to
$1,067,846 for the six months ended June 30, 2000.  Under U.S. GAAP, the Company
reported  a net loss of  $(283,112)  for the six months  ended June 30,  2001 as
compared to a net loss of $(1,084,211) for the six months ended June 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

As at June 30, 2001, the company's working capital deficit totaled $1,774,050.
The company has available a line of credit with its lead bank for up to
approximately  $1,300,000 but is in negotiation to secure an extension of the
existing arrangement and final settlement. The established credit facility
bears interest  at the bank's  prime  lending  rate plus 3.0% per annum with
interest payable monthly.  Forbearance agreements have been negotiated with
its secondary bankers  and a  repayment  schedule  for  the  balances
totaling  approximately $225,000 under capital lines of credit,  has been
negotiated.  The capital lines of credit bear varying  interest  rates from
the bank's prime  lending rate plus 0.75% to 9.45% per annum.

The company has  obtained a  financing  facility in the amount of  CAN$4,300,000
(US$2,745,000) from Morrison Financial Services Limited ("Morrison  Financial"),
in order to comply with its  performance  obligations in respect of the contract
with Public Works and  Government  Services  ("PWGSC") for civilian  health care
services for in-garrison support for the Canadian Forces.

Under this facility, Morrison Financial will purchase qualifying invoices issued
to PWGSC,  advancing  up to 80% of the face amount to the company at the time of
presentment  with the balance paid out in full upon  collection  of the invoice.
Discount  fees will be  calculated  at .09375% per day (34.218% per annum) times
the aggregate amount advanced and outstanding under each invoice.  This facility
will be secured by a general security  agreement  granting Morrison  Financial a
charge  on all  assets  and  undertakings  of  the  company,  implementation  of
appropriate  procedures and completion of all  requirements  under the Financial
Administration  Act and  postponement  and  subordination of all security in the
company held by a third party (bank) but only in respect of this financing.

Forward-looking  statements of Med-Emerg  International  Inc. included herein or
incorporated by reference including,  but not limited to, those regarding future
business  prospects,  the  acquisition  of additional  clinics,  the adequacy of
capital  resources and other  statements  regarding  trends  relating to various
revenue and expense items,  could be affected by a number of  uncertainties  and
other factors beyond management's control.



<PAGE>



PART II B OTHER INFORMATION

ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No disclosure required.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      On June 26, 2001, the Company held its annual and special meeting of
shareholders at which the following proposals were adopted: (i) the election
of the Company's Board of Directors; (ii) the appointment of Schwartz,
Levitsky, Feldman, llp, Chartered Accountants to serve as the Company's
independent accountants for the ensuing year; and (iii) a special resolution
empowering the directors to determine, from time to time, the number of
directors of the Corporation and the number of directors to be elected at
each annual meeting or annual resolutions of the Stockholders, subject to
NASDAQ corporate governance rules.


Proposal 1

Each of the following persons were elected to serve on the Company's Board of
Directors:

William Thomson     3,685,647 Shares In Favor     -0-     Shares Against
                    ---------                 -----------
Ramesh Zacharias    3,685,647 Shares In Favor     -0-     Shares Against
                    ---------                 -----------
Robert Rubin        3,685,647 Shares In Favor     -0-     Shares Against
                    ---------                 -----------
Patrick Michaud     3,685,647 Shares In Favor     -0-     Shares Against
                    ---------                 -----------
Dr. Frank Baillie   3,685,647 Shares In Favor     -0-     Shares Against
                    ---------                 -----------

Proposal 2


The Company's independent accountants, Schwartz, Levitsky, Feldman, llp, were
elected for the ensuing year by the following vote: 3,685,647 shares For, -0-
shares Against and -0- shares Abstained.

Proposal 3

A special resolution empowering the directors to determine, from time to
time, the number of directors of the Company and the number of directors to
be elected at each annual meeting or annual resolutions of the Stockholders,
subject to NASDAQ corporate governance rules was approved by the following
vote: 3,685,647 shares For, -0- shares Against and -0- shares Abstained.

ITEM 5.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.

         None.

(b)      Reports on Form 8-K.

         There were no reports  filed on Form 8-K during the quarter  ended June
30, 2001.

SIGNATURES


<PAGE>


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  caused  this  report to be signed on its  behalf by the  undersigned
thereunto duly authorized.


                          MED-EMERG INTERNATIONAL INC.


                               By:      /s/ Ramesh Zacharias

                               Ramesh Zacharias
                               Chief Executive Officer

Date:     August 10, 2001